Abu Dhabi: With inflation rates expected to be lower than the average pay rise in 2013 in the Middle East and North Africa (Mena) Region, Mercer, a global consulting leader in talent, health, retirement and investments, expected that the expected increases will lead to a real pay growth for the working population, a sign of development in the region.
The survey showed that companies in Africa are anticipating average increases of 8 per cent and companies in the Middle East are expected to give employees increases of 5.4 per cent in 2013.
“The Middle East and Africa has the largest variation in forecast pay increases due to the diverse nature of the region. Companies in Morocco (4.9 per cent), Tunisia (5.3 per cent) and Algeria (6.8 per cent) are predicting high pay increases to employees compared to those in Western Europe, while employees in Egypt and South Africa are anticipated to receive 10 per cent and 7 per cent, respectively,” Mercer’s 2012 Total Remuneration Survey revealed.
The survey showed that the general salary increase expectations in the GCC region range from 5 to 6 per cent, the UAE (5 per cent), Bahrain (5 per cent), Oman (5.1 per cent), Qatar (5.2 per cent) and Kuwait (5.4 per cent), while Saudi Arabia is anticipated to enjoy the highest increase in pay of 6 per cent in 2013.
“These figures have remained relatively unchanged over the last couple of years, a sign of the region relative economic stability and mature business environment,” said Zaid Kamhawi, Middle East Business Leader for Information Product Solutions at Mercer.
Kamhawi said: “Anticipated pay increases are affected by consumer price inflation, the anticipated pay increase in 2013 are predicted to be above the forecast inflation generating real pay growth for employees.”
He pointed out that firms do not give due concern and attention to inflation rates while budgeting for salary increases.
“Companies however are placing less emphasis on inflation rates when budgeting for pay increases, and factoring such variables as relative pay competitiveness, affordability, labour market conditions and confidence in their business outlook,” remarked Kamhawi.
“In 2012, like in other regions, we saw the introduction of salary freezes in a number of Middle East markets,” he added.
Kamhawi pointed out that an estimated 5 per cent of companies will look to freeze salaries in 2013 across the region.
“The Middle East region showed the lowest and healthiest figures across the Mena region in terms of salary freezes,” he stressed.
Kamhawi had said last year that the anticipated salary increases in the region are higher than what is seen in developing countries and above inflation, adding that it was a clear reflection of the growth expected by Middle Eastern companies and an indication of their need to retain quality talent. According to Mercer’s salary survey, 60 per cent of companies in the region were looking to increase headcount end of 2012, and 70 per cent of firms plan to recruit in 2013.